Launching your own business is an incredibly thrilling experience, but it can also feel somewhat intimidating as you navigate through the details. In this piece, we explore what you should consider before your launch day and after.

What motivates you to establish your own business?

Starting a business can lead to greater money and independence, but it requires a significant amount of effort at the beginning. We hate to say it, but there will be moments when you must make sacrifices and unpleasant decisions.

If you understand the logic behind it, you will be more motivated, and having defined goals will allow you to plan how to reach them more effectively.

Check out: Developing the Ideal Business Plan: An Extensive guide

So, ask yourself why you are starting this business. Someone who establishes a business to benefit the local community will take a different approach than someone who wants to make enough money to live on without working for someone else.

Which business structure works best?

Got a concept and name for your business? Great! To make things official, you’ll now need to pick what sort of legal structure you should employ to establish your firm. Don’t worry, this isn’t as difficult as it sounds, but it does involve a bit of research.

All business formats have their merits and cons depending on your circumstances, so it’s worth seeking a specialist for help if you’re not sure. The most frequent business structures in the UK are: Sole trader, Limited company, partnership, Limited Liability Partnership (LLP)

Individual Business Owner

A lot of low-risk start-ups. Register as a sole trader because it is the cheapest, quickest, and simplest way to start a new business, and you will not need to be listed with Companies House. Simply register with HMRC as soon as possible after starting your firm to be eligible for self-assessment.

Limited corporation

The main advantage of incorporating as a limited company is that you, as the owner, are only liable for business obligations up to the value of your shares. In other words, unlike a sole trader, your business and personal money are kept separate, so if the company runs into financial troubles, your personal assets are safe.

Some individuals believe that operating a limited company is more complex than being a lone trader since directors have certain obligations. You’ll also need to file comprehensive accounts and pay Corporation Tax every year, as well as your own tax return to disclose any dividends you get.

You might want to read our article, Should I Register as a Sole Trader or a Limited Company? beneficial here.

Partnership

If you intend to run your firm with someone else, consider forming a partnership. You then share responsibility and decision-making, so make it clear how profits will be divided.

Limited Liability Partnerships (LLP)

This is similar to a corporate partnership but with the added benefit of restricted liability. Unlike normal partnerships, forming an LLP establishes a separate legal entity for its owners, giving your personal assets more protection from whatever happens to the business.

What occurs when I purchase a franchise?

Franchising permits one business to use another’s branding and operations, typically in exchange for fees and royalty payments. It could indicate that you’re creating a business based on an established model that

Perform market analysis.

Researching your target demographic firsthand is the most effective way to truly understand what they want and need. It also helps you gain a much better understanding of your industry and competition. Regular market research data will also assist you in making crucial company decisions, such as pricing and product development, allowing you to avoid costly mistakes.

An excellent approach is to ask as many different people as possible. To reduce bias, approach strangers and ask them to personally test your product or service, if possible. Focus groups are a common method, but you may also conduct an online survey. Of course, look into what your competitors are doing to determine if there is a market gap that you can cover. 

How will you fund your start-up?

When it comes to funding your startup firm, there are numerous choices available. The government now provides many small business loans and grants (the Finance and Support section of the Gov.uk website is an excellent starting point). It’s also worth contacting your local council.

You might also opt to pitch to an investor or try crowdsourcing. Again, you’ll need to do your homework and ensure that your company plan is completely sound. Whatever you do, make sure you can repay any loans and avoid getting into financial trouble that will sink you before you can swim.

Starting a business with minimal or no funds.

Starting a business can be expensive; however, this varies depending on what you’re doing, and some businesses consciously aim for much cheaper start-up costs than others.

Whatever you’re starting, keeping costs low (while maintaining quality) can help you achieve the critical break-even point and begin producing a profit sooner. A few pointers we’ve learned from our years of working with firms are

Get the timing right: Launching your firm at the optimal time might save you a lot of money. For example, you may spend your entire marketing budget advertising sunglasses in the winter or in the summer, when more people are likely to be interested.

Choosing Your Workspace: Renting or purchasing space is generally one of the most significant expenses for a new firm. It’s also rather typical for it to be needless—we’re here with the harsh love! Unless it is absolutely required to work from a specific location, can you save money by starting your business somewhere else, such as at home?

Purchase used equipment: Yes, you can claim tax breaks on permissible expenses, but it’s normally more cost-effective to keep them low, especially in the early days!

Create a business plan and review it on a regular basis!

It is critical to be explicit and transparent about your business so that investors and stakeholders can grasp your aims and objectives. A business plan is the most effective way to express what distinguishes your company and how you expect to achieve your objectives.

A plan can also help a corporation stay on track. You’ll make better judgments if you know what you’re working toward, but you can always make modifications as you go and learn what works best for your business.

Your business plan should include information about your company’s operations, products or services, price structure, and other stakeholders, such as partners and workers. It should also clarify how customers will access what you’re offering (whether online, by phone, or in person), as well as your long-term growth objectives.

Create a cash flow prediction.

You should consider establishing a cash flow prediction even before you start your business; it is an essential element of the planning process. Cash flow forecasting is simply an estimate of how much money you expect your company to produce—and spend—over a given time period.

Once you have actual bookkeeping statistics to work with, you may improve the accuracy of your forecasts. Keeping your cash flow report up to date can help you make better decisions and feel more in charge of your finances!

Have a marketing plan.

Marketing your business well is key to success, no matter how uncomfortable you may feel getting out there and selling. Again, as with anything in business, having a plan is beneficial. This includes developing a strategy for social media, content marketing, public relations, marketing events, and search engine optimization. It may appear hard, but starting your firm slowly and relying on word-of-mouth referrals to expand is a viable strategy!

Our guide to marketing for new businesses is more detailed, but consider:

• Your customers.
• How your company looks, sounds, and appears (known as branding) and whether this is the proper message for your organization.
• The easiest approach is to notify folks that your business is on its way.

Understand your duties and obligations.

Running your own business means you’re responsible for almost everything, so take your time and make sure you understand what has to happen and when—and don’t be afraid to seek assistance when needed!

When is it necessary to submit your tax return?

Some of your duties will be determined by the type of business structure you pick, such as the type of tax returns you must file (which affects your reporting and submission deadlines).

Creating a separate bank account for a business is a legal requirement for limited companies, but it’s also recommended for any business. This allows for clear communication and access to the account, especially when working with others. Learn how to manage and record your finances. As accountants, we understand the importance of this.

It is vital for avoiding issues with HMRC.

Makes it considerably easier to prepare your tax returns and accounts.enables you to make more dependable business decisions based on actual facts.This means you’re more likely to claw back every single permitted spend.

If you are looking for an accountant to help you with your queries related to your business accounts, Call at 020 35765107 or send a message to book a free consultation. Learn more about our online accounting services and pricing.

Note: It must be noted that the information provided in all our blogs are solely for the awareness purposes and are designed with the intention to create an ease for the reader to understand the rules and their importance. However, it should never be considered as an ultimate replication of rules. RezEx Accountants (RezEx Ltd) does not own any responsibility for any unpleasant event that may arise due to misinterpretation of a specific part or whole of the information.